150: Eastman's legacy How rich was he? Very rich, according to Forbes

Thomas Adams//July 9, 2004//

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In 1918, Forbes magazine published its first list of America’s 30 wealthiest people. Rochester’s George Eastman was among them.
Yearly income for Eastman, founder of Eastman Kodak Co., was listed at $2.5 million, putting him alongside business tycoons Pierre duPont, James Duke, Henry Phipps, Julius Rosenwald and Louis Swift. His total wealth was listed at $50 million, the same as the five whose annual wages matched his, plus Jacob Schiff, a North Carolina tobacco magnate whose income was listed at $3 million.
Forbes revisited that list in 2002, with an additional column that converted the $50 million fortunes to 2002 standards. That put Eastman’s wealth at $547.5 million.
Comparing the worth of individuals from one era to another is difficult, if not impossible, to calculate, experts said, but Eastman’s wealth would put him at the top of current lists, too.
“He clearly would be,” said Stanley Engerman, an economic historian at the University of Rochester.
The closest to Eastman that anyone in the Rochester area has come in the last 50 years, in wealth and philanthropy, was Xerox Corp. founder Joseph Wilson during the “golden days” of that company, Engerman said.
“It is difficult to correlate dollars,” Rochester city historian Ruth Rosenberg-Naparsteck said. “(Eastman) was certainly rich enough to dictate to many how the government should work and how social services should be dealt with.”
The task is complicated by factors such as increases in cost-of-living standards over extended periods.
“As (economists), we have a difficult enough time just evaluating the cost of living,” said Kent Gardner, director of economic analysis for the Center for Governmental Research Inc.
“One way that economists get around the problem of the non-compatibility of cash over long periods of time is to compare averages within the time period to current averages,” he said.
The average annual manufacturing wage in 1920 was $1,158, U.S. Census figures show, which was 0.046 percent of Eastman’s 1918 income. The average annual manufacturing wage in 2002 was $44,097, the census reported, or 0.43 percent of Bausch & Lomb Inc. chairman and CEO Ronald Zarrella’s pay of $10.1 million that year. Zarrella was the highest-paid public-company executive in the Rochester Business Journal’s 2002 Book of Lists.
The comparison, however, does not account for variables such as the percentage of workers who held manufacturing jobs in 1920 compared to today, or the change in what is considered to be manufacturing today, Gardner said. In addition, the nature and quality of goods and services available to consumers has changed since the 1920s in ways that can’t be measured effectively, he said.
“But I think it’s quite fair to say that Eastman was making a little more than 2,000 times what the average manufacturing worker was making, and Zarrella made 200 times what the average manufacturing worker made (in 2002),” he said.
If Eastman’s 1918 salary were multiplied 2,000 times the 2002 average manufacturing wage, his yearly pay would be $95 million.
Oil magnate John D. Rockefeller was, by far, the wealthiest on the 1918 Forbes’ list, with yearly income of $60 million and an estimated fortune of $1.2 billion. William Rockefeller, an oil and railroad magnate, was fourth on the richest list with an income of $7.5 million and an estimated worth of $150 million.
“You can see why the Rockefellers are such a power today,” Gardner said.
Henry Clay Frick, the head of what was then the world’s largest coke producer, was a distant second in wealth to John Rockefeller with an annual pay of $11.25 million and an estimated fortune of $225 million.
Among Eastman’s financial contemporaries, duPont made military explosives that were used in World War I. Duke was a titan in tobacco and power in North Carolina. Phipps was a leader in steel production. Rosenwald set up the organizational structure that enabled Sears, Roebuck & Co. to become the premier retailer of the mid-1900s. Swift took over his father’s meat-packing business and made it the largest in the country.
“What’s striking about the list is that most of the people on it provided goods and products at lower prices,” Engerman said.
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